Vauld parent files for six-month moratorium; has liabilities worth $400 mn

Defi Payments PTE, which runs crypto lending firm Vauld, has filed for a six-month moratorium period to restructure the company and has assets worth $330 million against $400 million in liabilities, the company said in an email to its investors on Tuesday. 

In an email to its retail investors, Vauld said, “On a group level, Vauld has assets worth about $330 million and liabilities worth about $400 million at this time.”   

“We have a mismatch of assets and liabilities of Defi Payments Pte Ltd where the main contributing factors to the gap have been mark to market losses on BTC, ETH, and MATIC trades and exposure to UST,” it stated in the email.

The company also has a mismatch of tenure where it has committed a significant proportion of its assets under management (AUM) towards loans with a tenure of another three to 11 months that can’t be recalled early.

It has filed for a moratorium in the Singapore Courts according to section 64 of the Insolvency, Restructuring and Dissolution Act, 2018 on July 8, the email said.

Adding to the mail, Co-founder and CEO Darshan Bathija said, "I want to clearly state that this filing does not mean that we are winding up or shutting down the company. Instead, we are asking for time to formalize our restructuring strategy so that we can resume operations and give you the best financial outcome.”

If the deal with Nexo falls through, Vauld would explore options like raising additional venture capital, looking into alternatives to a full acquisition, waiting for some of its invested capital to be returned, converting debt to equity, releasing its own token, or consider developing a payment plan tied to future revenue.

Vauld was founded by Bathija and Sanju Sony Kurian in 2018. The platform lets individuals buy, borrow, lend and trade in cryptocurrencies. The first signs of trouble came on June 21, when Bathija tweeted that Vauld had to lay off up to 30% of the workforce.   

The company has attributed its financial challenges to volatile market conditions, and the financial difficulties of key business partners. Since 12 June, when the crypto market crash was triggered by the collapse of Terraform Lab’s UST stablecoin, the Celsius network pausing withdrawals, and Three Arrows Capital defaulting on their loans, Vauld customers have withdrawn in excess of $197.7 million.   

Even so, the decision to suspend withdrawals came out of the blue. In an interview wiith Hindu BusinessLine in May, Bathija had said Vauld had $1 billion assets under management.